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Tips for Rental Property Accounting Records in East Brunswick

Tips for Rental Property Accounting Records in East Brunswick

Do you want to learn how to set up perfect accounting records? Whether you're a new landlord running your first investment property or sitting on a vast and sprawling empire, your rental property accounting must be immaculate.

Having immaculate records makes all the processes concerned with taxes, auditing, and compliance much smoother for you. Your financial records will also be much more helpful for forecasting when you want to apply for loans or lines of credit.

The best part is that setting up excellent bookkeeping practices isn't difficult. Follow these accounting tips and see the improvement in no time.

Get a Separate Business Banking Account

Your bank account and bank statements center your rental property accounting. The last thing you need is to have personal transactions mixed in with your business transactions. Using a separate bank account for rental property banking avoids this problem entirely.

A separate account makes identifying and calculating valid tax deductions much easier. It also shows exactly what your taxable rental property income is.

On the practical side, a separate account also makes reconciling different transactions easier. It's possible to use your bank statement alone to faithfully reconstruct everything you paid for and received if you lose all your other records.

Use Dedicated Rental Property Accounting Apps

There are many purpose-built programs and apps for rental property accounting. Using one of these is far superior to the old spreadsheet approach.

The first trait to look for in one of these is automation. The easier it is for the software to automatically generate reports and fill double-entry ledgers, the more time you save.

The second desirable trait is the ability to integrate with other services. If the software integrates with your banking profile or tenant portal, you save even more time.

Documentation Capturing Apps or Systems

You may also want a system or app that captures and files documents. Every lease agreement, receipt, invoice, and payment notification supports the story your books and bank account tell.

Tenant portals are magnificent tools for this purpose. These provide an unsinkable paper trail of all your dealings with each tenant you have.

Schedule a Dedicated Admin Day

Automation and clever apps make admin easier but don't eliminate it entirely. It remains a good idea to set an appointment with yourself to work through and collate your accounting records.

This will allow you to review the accuracy of your reports and monitor your business's performance. It will also eliminate the stress of reacting to problems rather than proactively sorting issues out.

Find a Partner That Does Rental Property Accounting Well

Rental property accounting is a vital part of a landlord's job. If you want this job done efficiently and effectively, implement these simple practices.

Separate your business and private banking to avoid arduous admin and expensive mistakes. Then, get good accounting software and a service that provides a tenant portal to work through. This way, you'll only have to take a day every now and then to do admin.

If you need further help, why not partner with CMS? We're New Jersey's experts in modern property management approaches, including in our approach to accounting. Get industry-leading help by reaching out to us today.